B.C. pulls plug on planned tax cut.

VICTORIA – The B.C. government has decided to suspend plans to
deliver the second-largest tax cut in the province’s history.

The proposed tax cut – a 15-per-cent reduction in personal income tax rates
for the first $72,000 of personal income – was announced by Premier Gordon
Campbell in a televised address last month. The tax cut was widely regarded as
a Hail-Mary attempt by Campbell to reverse the free fall in public support he
and his Liberal party experienced after introducing the broadly unpopular
harmonized sales tax.

“We believe this middle-income tax relief will help families across the
province deal with the challenges that they may face in the years ahead,”
Campbell said at the time.

The tax break would have amounted to between $68 and $616 a year in savings,
depending on a person’s income level. It also would have given B.C. the lowest
provincial income tax in Canada on incomes up to $130,000, Campbell said.

“In order to ensure the executive council has maximum flexibility to set
government’s economic and fiscal agenda, cabinet has decided to suspend the
planned tax reduction,” said a statement from Campbell on Wednesday.

“The cabinet has decided that during this period of transition it is
important that decisions are not made that would unnecessarily limit executive
council’s ability to set priorities and implement their agenda for government .
. . These measures will ensure that government meets its legislative
obligations and protects key government services. “

Dogged by falling poll numbers and pressure from within his own caucus and
cabinet, Campbell announced his resignation Nov. 3.

He will stay on as premier until a leadership convention is held in February.